If Robots Replace Humans, Maybe They Should Be Taxed

Imagine a human factory worker who does $50,000 worth of work. As such this human worker pays income tax, social security, state, federal, ect. Now imagine that the factory converts to a smart factory and his job is replaced by a robot. Shouldn't that robot be subject to similar taxation?

That's the argument Bill Gates made in a recent interview with Quartz. The philanthropist and founder of Microsoft is worried that the pace of automation and worker replacement will happen too rapidly, faster than regulation, and society in general, can keep up. A tax on robots and robotic production, he argues, would slow down the speed of automation and allow businesses and regulators to plan better for worker displacement and the larger impact of automation.

From his interview with Quartz:

“You ought to be willing to raise the tax level and even slow down the speed” of automation...That’s because the technology and business cases for replacing humans in a wide range of jobs are arriving simultaneously, and it’s important to be able to manage that displacement. You cross the threshold of job replacement of certain activities all sort of at once.”

In Gates' mind the the tax revenue would come from profits generated by the cost savings made with robotic automation or directly through some sort of “robot tax.” Gates doesn't believe robotics companies will be outraged by the tax and he feels it would not discourage innovation:

“People should be figuring it out. It is really bad if people overall have more fear about what innovation is going to do than they have enthusiasm. That means they won’t shape it for the positive things it can do. And, you know, taxation is certainly a better way to handle it than just banning some elements of it.”

He continued by saying the revenue generated by the tax could go toward helping people with lower incomes – improving social services, elder care, and providing better quality education for children.

Gates is not alone in his thinking. On February 16 the European Union (EU) rejected a proposal to impose a so-called robot tax on business owners in order to fund programs that would support and retrain workers whose jobs were automated. In a statement released to Reuters, The International Federation of Robotics (IFR), an industry group concerned with the global robotics industry, said a robot tax would have a “a very negative impact on competitiveness and employment.”

The robots industry has argued that robotic automation will be a boon to the job market – increasing productivity and creating new jobs. A 2015 white paper , "Robotics Fuel the Next Wave of U.S. Productivity and Job Growth," released by the Association for Advanced Automation (A3) compared data from the Bureau of Labor Statistics with robot shipment data and reports from a wide range of US manufacturing firms and concluded that use of robots in manufacturing is correlated with an increase in employment.

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